Is Apple Quietly Assembling an SMB Trojan Horse?

Mobile payments continue to show promise for the long-elusive holy grail that is marketing attribution. However they’ve erstwhile followed the adoption rate I predicted almost two years ago: slowly.

The holdup is mobile payments’ lack of value proposition beyond a slightly lighter wallet. It needs more than that to change such an entrenched consumer habit. Paper and plastic were never a pain point.

In fact, it turns out that normal people aren’t as enamored by shiny new technologies as we in Silicon Valley are. They want tangible utility, such as saving time, money, on-demand convenience or skipping lines.

Starbucks’ “order & pay” feature has been the shining example of that value-tradeoff. It’s helped motivate 11 million people to make the mobile payment leap — representing 20 percent of its U.S. sales.

The other side of the chicken-and-egg formula is merchant compatibility. There we’ve seen meager adoption, even at the big box level. Don’t even think about large scale SMB deployment anytime soon.

However one recent product could accelerate that. And it’s gotten almost no attention relative to the media field-day around sexier mobile payment scenarios that aren’t happening.

That product is Square’s NFC reader for SMBs. Co-promoted by Apple and announced at WWDC, Apple this week elevated it to one of the most exposed and successful retail spaces on the planet: Apple Stores.

The $49 reader accepts Apple Pay, which significantly lowers the barrier for SMBs to get in the game. In other words, it will democratize tap-to-pay transactions, just as Square did for credit card acceptance.

But Apple’s endgame is where this all starts to get interesting. Boosting Apple Pay is one obvious driver. But, as it often goes with Apple, there are much bigger ambitions to lock in market share in new areas.

With that backdrop, Square’s contact-less reader could be a Trojan horse into SMBs, which then enables several other operational functions (a big trend in local). This includes tying it back to local search.

To expand on that topic, it’s widely under-recognized that Apple is slowly becoming a formidable local search player. This is mostly fueled by on-deck positioning of Apple Maps, Siri and Spotlight Search,

“Apple has quietly created this local search behemoth, almost in full view but no one has been paying attention to it,” says Andrew Shotland who’s watching this trend closer than anyone.

In fact, 61 percent of U.S. iPhone owners use Apple Maps (Comscore). Shotland and I recently discussed that Apple isn’t publicizing this because the black eye left by Mapgate is still healing.

Back to Apple Pay and Square: altogether Apple has the pieces to assemble a holistic purchase path. That includes search, offline navigation and now SMB payments — all happening though its pipes.

Through all this, Apple can tap that point-of-sale Trojan horse to access unique SMB data and functionality. That could include real time inventory, and Starbucks-like “order & pay” capability.

Features like this will not only be mobile payments’ true adoption drivers, as argued above. They’ll also serve as an added utility to boost the appeal of Apple’s local search properties, such as Maps.

Spotlight search, Safari, Maps and Siri — all enjoying default positioning on iOS devices — could lead local searchers to SMB profile pages that include product details and order/schedule/pay features.

The default positioning makes this possibility compelling due to the sheer mass of iOS penetration. But more daunting, if done right these local search scenarios could sidestep Google completely.

It will take a while for these wheels to turn, as it goes with all things SMB. And the Apple vision is admittedly speculative, but starting to materialize. In true Apple fashion, it could be a big one.

Michael Boland is chief analyst and vice president of content at BIA/Kelsey. Previously, he was a tech journalist for Forbes, Red Herring, Business 2.0, and other outlets.

Really interesting idea, but how much data does Apple actually have in this equation? My understanding was they kept pretty minimal data from Apple Pay (one of its selling points is less tracking), and Square is the one collecting and keeping the data with their product … so still remains a pretty big blackhole for Apple, no?

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